Johnson & Johnson (NYSE: JNJ) saw its shares get hit after earnings, but it was more than just the earnings and guidance to blame. Along with issues around ongoing talcum and opioid exposure, some rivals may have been winning at the company’s expense.
It is common for companies to see their market share rise and fall from quarter to quarter. It happens either from better sales teams or from changing preferences in customers. Sometimes there is just good old-fashioned luck involved.
24/7 Wall St. has checked into companies that may have been winners here, and there appear to be several.
A Canaccord Genuity report on Wednesday covered the downstream impacts from the prior day’s Johnson & Johnson second-quarter report. The firm’s medical device analyst, Jason Mills, viewed Johnson & Johnson’s commentary around stroke and electrophysiology as being positive for Boston Scientific Corp. (NYSE: BSX). It even looks as though the stock is ready to challenge those former all-time high levels from way back in 2004. Penumbra Inc. (NYSE: PEN) was called out as another would-be winner, and its shares rose 2.5% to $174.05 on Wednesday, after hitting an all-time high of $178.33. Mills sees both companies having strong market growth trends in these arenas at large.
In the surgical robotics field, Mills viewed Johnson & Johnson’s commentary as neutral to positive for Intuitive Surgical Inc. (NASDAQ: ISRG). That stock closed up 1.5% at $523.50 on Wednesday and is still far short of its year high of $589.32. Mills pointed out that Johnson & Johnson’s management called out digital surgery as a potential disruptive initiative in medtech and noted that Intuitive Surgical has invested heavily and consistently in innovation in this arena.
Neuronetics Inc. (NASDAQ: STIM) also saw its shares rise on Wednesday, by 1.5% to $12.80 on normal trading volume. This stock is down from a high of almost $40.00 in the past 52 weeks, so it could use any good news it can find. Canaccord Genuity referenced Neuronetics as it relates to depression and the FDA’s recent approval of Johnson & Johnson’s Spravato (esketamine). Mills believes that it likely will be established as a downstream treatment from transcranial magnetic stimulation for non-acute major depressive disorder patients and thus does not pose significant competitive risk to Neuronetics.
Shares of Stryker Corp. (NYSE: SYK) also rose 1.2% to $207.95 on Wednesday, after only a nine-cent loss the prior day. While it may not be specified, Johnson & Johnson’s sales of medical devices fell by 4.1% to $6.49 billion, and while ahead of expectations, specialty surgery revenue and general surgery revenue both fell even as advanced surgery sales rose. Johnson & Johnson apparently has lost some surgery market share to pure-play device companies that are more keenly focused, and this may include hip and/or knee.
Johnson & Johnson shares fell another 64 cents (0.48%) to $131.86 on Wednesday, and that is after a drop of $2.21 to $132.50 the prior day when the earnings reaction came out. It was a $140 stock just last week.